JOHANNESBURG – ArcelorMittal South Africa (Amsa) has approached the International Trade Administration Commission (Itac) for safeguards on imports of structural steel products amid concerns over poor demand and rising steel imports.
An Amsa spokesperson said yesterday that the safeguards would not only apply to the company, but to the entire local steel industry.
“Amsa, in collaboration with Evraz Highveld Steel, has applied for safeguards on structural steel products produced in the Highveld Mill,” said the spokesperson, adding that the company had not indicated any level for the safeguard duty.
“A safeguard application simply presents the facts and, based on those facts, Itac will decide whether to grant a safeguard and if so, at what level it should be placed.”
The application comes amid global supply and record export volumes by countries that have excess steel capacity.
In response to the application, Itac wrote a letter to the company last Monday (June 22) confirming it had initiated an investigation for remedial action in the form of a safeguard measure for structural steel.
Itac said in the letter that all countries that might be impacted by the safeguard had been contacted and requested to provide written comments on the matter.
In its 2019 annual report released earlier this month, Amsa said it was concerned about increased imports, particularly from China. It warned that the industry was in the eye of a storm amid continuing imports of unfairly subsidised steel, poor downstream demand and an unprecedented, deepening disconnect between the all-important raw material basket and realised steel prices.
Earlier yesterday, the National Employers Association of South Africa (Neasa), which represents the interests of employers across all industries, said it was gearing up to oppose Amsa’s application for a 120 percent duty on imported long steel products.
Neasa chief executive Gerhard Papenfus called on members to raise R200 000 towards obtaining the services of a consultant, with knowledge of the field, to oppose Amsa’s application.
“Although the outcome cannot be guaranteed, the severity of the impact of these duties on our already strained steel-making industry justifies that Amsa’s application be opposed in the most effective manner,” Papenfus said.
“If this application is granted, Amsa will have carte blanche in terms of its pricing of the relevant long products,” Papenfus said.
Papenfus said Amsa, Africa’s steel-making giant, had applied to Itac for a 120 percent safeguard duty on long products, including T-sections, U-sections and beams.
Papenfus charged these products were already subject to a 10 percent ad valorem duty, and safeguard duties would add an additional 120 percent, bringing the total duty to 130 percent.
“This means that these sections will be 130 percent more expensive than what the same product will cost if it is imported from a cost-effective, new technology steel manufacturer abroad,” Papenfus said.